Amsterdam-based Bitvavo, a cryptocurrency exchange, said that it has rejected Digital Currency Group’s (DCG) proposal to repay 70 per cent of Genesis Trading’s debt.
Now, Bitvavo along with other creditors and advisors are actively engaged in conversations with DCG to recover the resulting debt as soon as possible.
The Dutch cryptocurrency exchange says that DCG has sufficient funds for full repayment. Bitvavo said it is confident that a solution can be found to satisfy all concerned parties involved.
The Netherlands’ company also highlighted that the debt repayment would not be jeopardised, even if Genesis files for Chapter 11. Bitvavo also assured that the debt repayment would not be affected by a possible US Investigation over internal transfers within DCG.
However, the debt repayment timelines could be affected, adds the company.
On Tuesday, January 10, Cameron Winklevoss, co-founder of Gemini, published an open letter accusing DCG CEO Barry Silbert of deception and fraud. He also called for Silbert to be replaced as CEO.
Last December, the crypto exchange lent €280M to Genesis Global Capital, a subsidiary of DCG.
The loan was offered as a way for Bitvavo’s customers to access off-chain staking services and receive interest on their cryptocurrency tokens.
After the collapse of FTX in November, Genesis froze all withdrawals, locking Bitvavo’s money in DCG.
However, the Dutch crypto exchange has assured its customers that the frozen withdrawals at Genesis won’t impact the platform.
After FTX filed for bankruptcy on November 11, several crypto players froze withdrawals as a way to prevent liquidity problems. Genesis also froze withdrawals on its platform, which forced Bitvavo with no other way to immediately recover the loan.
The Dutch company manages approximately €1.6B in deposits and digital assets, and is registered with the Dutch Central Bank (DNB) as a digital assets services provider. This prevents money laundering on its platform, but Reuters reports that this provision does not make it subject to “prudential supervision by the DNB or Netherlands’ Financial Markets Authority.”
Bitvavo: What you need to know
Launched in 2018, Bitvavo’s goal is to bridge the gap between traditional currencies and digital assets. The company offers an online exchange platform that can easily buy, sell and save digital currencies simply and safely.
According to the Amsterdam company, the crypto market is growing in the Netherlands and becoming more mature. More than 1.6 million people own cryptocurrencies in the country, and more than a million are Bitvavo customers.
The company is registered as a digital currency exchange at the Central Bank of the Netherlands (DNB). Last year, Bitvavo was voted winner of Deloitte Technology Fast 50, followed by Sliedrecht-based Maqqie and Groningen-based Let’s Get Digital in second and third place, respectively.